Block 3: a series of substantive amendments to improve the governance structure of the Group.

By Clause 30 of the Constitution, the Constitution may not be amended except with the consent of the Charity Commission and by a 2/3rd majority vote of Members at a General Meeting, the amendments having been circulated with the Notice of the meeting.

Consequently, at the 2016 AGM, the Executive Committee [‘the EC’], as the trustees of The Group, sought approval in principle to the proposed amendments, in order to proceed with the drafting which will be placed for Charity Commission approval and the vote by Members.

By a show of hands, the AGM the membership expressed its approval in principle for the recommended amendments; nevertheless, in the interest of obtaining as wide a view as possible from the membership, the Chairman undertook that the draft amendments would be posted on The Group’s website for Members’ comments, and would be accompanied by a Background Paper setting out two matters:

(1) the process by which the EC has arrived at its recommended amendments; and

(2) the explanation and rationale for those amendments.

This Paper is that document. It is divided into two parts:

Part 1: an overview of the consideration by the Executive Committee of the question of constitutional reform;

Part 2: a description of and rationale for the amendments proposed.

Comments were invited from Members by 15 November 2016 to be incorporated in the discussions with the Charity Commission.

It is currently intended to post the Notice of the Special General Meeting to consider formally the proposed amendments with the autumn edition of ‘The Georgian’ magazine (ie early December), so it is intended to finalise the amendments by mid to late November. Member’s contributions would be welcomed, therefore, as early as reasonably possible, to enable them to be fully taken into account.

Part 1: Executive Committee Consideration of Constitutional Reform:

The question of amendments to the Constitution formed part of the debate at the 2014 AGM. The then Chairman, Sir Mark Lennox-Boyd, indicated that the Executive Committee would consider these alongside the wider issue of the governance of The Group and make recommendations to the 2015 AGM.

On 14th October 2014, therefore, the Executive Committee created a Constitutional Review Sub-Committee, chaired by Sir Mark, as Chairman of the Group and consisting of Christopher Crouch, as Treasurer, Hugh Petter, as Vice-Chairman, and Adam Goodison, Stephen Platten and Rosemary Baird as EC members. The Constitutional Review Sub-Committee was asked to consider:

how the Constitution could be revised and updated to improve administration and governance; and

the optimal legal structure for the charity;

with the intention that that sub-committee would reach a recommendation and put it before the Executive Committee for approval, before being put to members at an AGM.

The Constitutional Review Sub-Committee then met three times over 2014 and 2015 and recommended, inter alia, that the governance arrangements be updated with a revived committee structure and that The Group should consider the advantages of becoming a Charitable Incorporated Organisation. However, rather than reach firm proposals the EC resolved in December 2014 that consideration on the issues be resumed after the appointment of the new Chairman in the Summer of 2015 to ‘enable the latter to actively engage with both areas before they were finalised, but in time for the new constitution to be approved at the [2015] AGM’.

Following the appointment of the new Georgian Group Chairman, Christopher Boyle QC, in July 2015, the question of governance and the constitution was considered through the formulation of the Georgian Group Strategy for the period of 2015-2018, which built on the Strategic Discussion undertaken by the EC at its meeting in December 2014.

At the 2015 AGM, the Chairman indicated that he was aware that there had been a promise to bring the question of constitutional and governance reform to the 2015 AGM, but that he had not yet had time to consider the matter in depth with the EC and undertook to bring a recommendation to the 2016 AGM instead.

At its meeting on 19th October 2015, the EC adopted ‘The Georgian Group Strategy (2015-2018)’. At Point 7, the Strategy provides: ‘That the Constitutional subcommittee should continue to explore improvements to the Constitution and appropriate legal structures, together with transitional arrangements, for the EC to report back to the 2016 AGM with a recommendation; to promote best practice in governance and oversight of the Charity, its activities and those of GETL [Georgian Enterprise and Trading Limited]’

In order to deliver that Strategy, the EC agreed, inter alia, the following steps:

that the Constitutional sub-committee be re-formed;

identify reporting responsibilities to the EC;

to aim to reduce the EC to 12 members + Chairman and Treasurer; and

report back to the EC with its recommended constitutional and legal changes.

Accordingly, the Constitutional Review Sub-committee was re-formed, under the chairmanship of Christopher Boyle QC, as Chairman of The Group, and comprising: Sir Josslyn Gore-Booth Bt, as Treasurer, Hugh Petter as Vice-Chairman, Rosemary Yallop and Rosemary Baird as EC members. Due to difficulties with aligning diaries, the sub-committee has subsequently conducted its business by email.

The sub-committee considered it convenient to divide the question of governance reform into four parts:

The question and mechanism for changing the legal status of the Charity;

The issue of tidying up the existing Constitution to remove anomalies and drafting infelicities;

Governance reforms which require Constitutional Amendments through an AGM; and

Governance reforms which require only changes to the Operational Framework, and not an AGM vote.

At its meeting on 15th February 2016, the EC accepted the recommendation from the Constitutional Review Sub-committee that:

The EC should recommend to the 2016 AGM an amendment to include a ‘winding up’ provision to allow the current unincorporated association to dissolve itself and create an incorporated association; then to work with the Charities Commission to be able to present a resolution to incorporate to the 2017 AGM;

The EC should recommend to the 2016 AGM amendments to tidy up drafting infelicities in the current Constitution;

The Constitutional Review Sub-Committee be asked specifically to place before the EC recommendations on substantive governance amendments, in order that these may be placed before the 2016 AGM. The specific issues upon which recommendations were sought were:

Reducing the number of EC members as per the Strategy;

The status and tenure of the Council;

Setting fixed terms for the EC and officers;

The constitutional position of the Young Georgians and its Chairman;

Creation and oversight of trading companies

Whether the Strategy and Operational Framework should be part of the Constitution;

Whether the three operational committees should be in the Constitution;

Updating membership categories.

Transitional provisions.

At its meeting on 18th April 2016, and on the recommendation of the sub-committee, the EC asked the sub-committee additionally to recommend on:

the updating of the Operational Framework to reflect the current committee structure under the Strategy,

to consider whether or not to create an Executive Secretary post, and

to consider how best to appoint trustees to ensure a relevant skill-set,

and to conduct a consultation by questionnaire with the existing trustees to garner opinions to assist in making its recommendations.

Accordingly, during June and July 2016, the sub-committee undertook a consultation with the EC by questionnaire on the issues set out above. The sub-committee then considered the responses to that consultation exercise and drew up proposed recommendations through August for presentation to the EC on 5th September 2016.

At its meeting on 5th September 2016, the EC received a report from the sub-committee, which it debated and voted upon. The EC resolved to accept the following recommendations:

to provide a mechanism for making The Group an Incorporated Charity by making it possible to wind-up the current legal status of the charity; the use of this power would be subject to a further EC vote in 2017 once discussions with the Charities Commissioners have been undertaken and terms agreed;

To make a series of ‘tidying up’ amendments to the terms of the current Constitution;

To make a series of amendments to reform and improve Governance, in line with the approved Strategy;

provide for Transitional Provisions to hold a Special General Meeting after the 2016 AGM to vote for 12 candidates to the EC from those proposed and seconded for that SGM;

a significant re-working of the Operational Framework to reflect current committee structure and clarity of reporting and responsibility between the EC, Officers, staff and sub-committees;

to not alter the constitutional position of the Secretary but to update the Operating Framework to clarify roles;

to retain appointment of the EC through election by the membership.

The EC therefore resolved to place Items (1), (2) and (3)(i)-(viii) (ie those requiring Constitutional Amendments) before the 2106 AGM and John McDonnell QC was instructed, on a pro bono basis, to draft Amendments accordingly, in three ‘blocks’ reflecting the above structure.

Accordingly, this was done, together with the production of a Note explaining the approval process under Clause 30 to the following effect. At the SGM, the proposal for transitional provisions was to hold an SGM in February 2017 to coincide with the opening of the 80th Anniversary Exhibition, to vote both on the proposed Amendments and, if passed to elect a new Executive Committee in accordance with the Amended Constitution at the SGM (ie a 1-stage process).

This arrangement was supported in principle by members at the 2016 AGM, but the timing of the EC election was a matter left over for further consultation and consideration. At its meeting on 17th October, the EC resolved that its preferred timetable (subject to consultation) was a 2-stage process as follows:

Finalise the drafting and Consultation with members and the Charity Commission in October/November;

Publish the Notice for an SGM with the December Magazine, including the proposed Amendments, as required under Clause 30;

Hold the SGM on Monday 6th February 2017, to consider and vote just upon the Proposed Amendments (followed by a Members’ Reception at the 80th Anniversary Exhibition);

If the proposed Amendments are approved at the SGM, to invite nominations for election to the EC by a specified date;

Hold the 2017 AGM in late June (ideally to coincide with the 2017 Georgian Group Fete) at which elections would be held to constitute a new EC.

Members are asked, specifically, therefore, to comment on any preference they have between the 1-stage proposal discussed at the AGM or the 2-stage proposal favoured by the EC above.

Following a presentation at the AGM by Rosemary Yallop and discussion from the floor on the merits of the Constitutional Reforms, the AGM signalled its approval, in principle, to each of the three blocks of amendments, permitting the EC to proceed to formal approval under Clause 30 in the manner it has recommended. A full debate on the merits of the proposed Amendments will be conducted at the SGM.

Since the AGM, Mr McDonnell QC and the sub-committee have produced the actual Amendments proposed to be placed before the SGM, subject to Charity Commission approval, and have opened discussions with the Charity Commission.

Part 2: description and rationale for the amendments:

These amendments represent the conclusions of a process of review which has taken place within the Georgian Group Executive Committee over the last two years. They have been reviewed for their legal implications by John McDonnell QC who has kindly provided his services pro bono, and he has also undertaken their precise drafting. The Group is very grateful to him.

All of these proposals have the sole and overriding objective of ensuring that the Group is governed under a clear and unambiguous structure, enabling the Group to operate in fulfilment of its objectives in the most effective way. The proposed amendments reflect in part the availability of new charitable structures created by recent legislation, in part changing philosophies of best governance practice within the charitable sector, and in part a need for some simple tidying up of areas of drafting which have proved to be ambiguous or just plain erroneous.

The EC emphasizes that these proposals and their underlying rationale are in no way to be construed as criticisms of the way in which the affairs of the Group have been managed to date. They represent instead an opportunity to review and revise a structure which has been in place largely unchanged for some time, and to reflect change and evolution in the voluntary sector as a whole in the understanding of how to encourage rigorous and strategically-driven management, with the aim of using the resources and expertise of those involved to the Group’s best advantage.

In its deliberations the EC also identified areas where changes could usefully be made to reflect the Group’s operations: these involve, for example, the formation of sub-committees and a re-definition of the role of the Secretary. It was felt that these were not matters to be included in the Constitution, being more appropriately enshrined in and governed by the Group’s Operating Framework document.

The Constitutional amendments are set out in three categories or Blocks, each of which addresses different requirements.

Block 1: ‘winding up’ provision:

Block 1 is a proposed addition to the Constitution of a mechanism for winding up the Group in its present form in order to transfer the assets of the Group into a different charitable vehicle which would have the same charitable purposes.

The Group is at present, along with many other charities, an unincorporated association with charitable status. Other types of vehicle have been available for some time, such as that of the charitable company limited by guarantee, but the Charities Act of 2011 introduced a new charitable vehicle called a Charitable Incorporated Organisation which can be of advantage from a legal and administrative point of view to charities which, for example, own substantial property assets.

The EC has considered this issue in some depth in the past, but it is stressed that no decision has yet been taken on whether conversion to this latter vehicle or indeed into any other form of legal and charitable entity is in the Group’s best long-term interests. Further research and advice, both legal and financial is needed before the EC can reach a concluded view and, if appropriate, a proposal is brought forward to Members. Such a change would, in any event, need the approval of both the membership and of the Charity Commission: this proposed amendment is simply a new enabling clause to provide for this eventuality, which at the moment the Constitution does not provide for.

Block 2: drafting anomalies:

Block 2 comprises a number of minor amendments to the Constitution to correct errors and ambiguities. In other words bits of defective drafting where the current wording is either unclear or does not fully or accurately reflect what was obviously the intention behind a particular clause. Such examples include Clause 3.1 which states that there are seven categories of membership and then goes on to list eight and obviously needs correcting; or Clause 7.3 which deals with the procedure at the AGM to confirm the nomination for President where for completeness and clarity it is proposed to insert after the phrase ‘a majority of members’ the words ‘present and voting’. There are 12 such minor changes none of which alter the intent or effect of the clauses concerned.

Block 3: substantive governance reform:

Block 3 comprises substantive proposed amendments aimed at improving the governance structure. They reflect the thoughts of the EC as expressed during the strategy discussions a year ago, which were then passed on to the Constitutional Review sub-Committee for further detailed consideration, to report back to the EC and thence to the Annual General Meeting and to this consultation exercise. They take account of much work by outside bodies which has been done in recent years in the charitable sector on the mechanisms of effective governance, both to safeguard the assets of charities and to promote their more effective operation in the proper fulfilment of their objectives.

In reviewing the Constitution the Executive Committee, as Trustees, have had regard to how it can best reflect and facilitate the Group’s objectives, as elaborated in the adopted Strategy.

This Block of proposed reforms is made up of a number of elements:

The first concerns the size of the Executive Committee and the term served by its members. At present the Constitution provides at Clause 12 for a membership consisting of the Chairman, the Treasurer and a further 21 Trustees elected by the Membership. In addition it has been customary for the Chairman of the Young Georgians to attend by invitation. This therefore adds up to an Executive Committee of 24 members, an unusually large number for a Committee charged with executive responsibility. This number can make it difficult to arrange meetings at times which maximise attendance and therefore maintain continuity of discussion; furthermore it can be difficult to ensure that within the time available each trustee is able to make their personal contribution at the meeting.

What is proposed is a reduction to 12 elected members together with the Chairman, the Treasurer, and, in recognition of the importance of the Young Georgians and the desirability of formalising their role, the ex officio membership of the Young Georgians’ Chairman, a total of 15. The Charity Commission suggests a maximum of 12 trustees as good practice but allows flexibility. Its published guidance suggests:

‘A charity’s board should have enough trustees effectively to carry out its duties but not so many that it becomes impractical to hold effective trustee meetings where everyone can participate in decision-making.’

The guidance of the National Council for Voluntary Organisations in its 2014 Code of Good Governance also states:

‘the Committee should be big enough to provide the skills and experience needed but not so large that decision-making becomes unwieldy.’

This guidance is at the nub of the EC’s conclusions that this reform would if implemented be in the best long-term interests of the Group as a whole, which is the only yardstick by which this proposal and indeed all these proposals should be assessed. It is also felt that creating a smaller group of Trustees will foster a greater sense of individual engagement by encouraging each Trustee to focus on a particular area of the group’s activities according to their interest and expertise.

Secondly, and hand in hand with a reduction in numbers, is a proposed limitation on terms of service for EC members and officers. Any committee always has to balance the need for experience and familiarity with the subject matter with the benefits of drawing in, over time, fresh insights and expertise. A limitation of three terms of three years is proposed for Committee and Officers alike, an arrangement commonly found in the voluntary sector, and like the previous proposal, a recognised aspect of good practice.

Thirdly, the transitional provisions would, if approved, involve fresh elections for all the 12 new Committee places at once, and the EC would encourage nominations from any member who might wish to stand, alongside those offering themselves for re-election at that point, as part of a fresh and transparent process.

Fourthly, it is proposed that the Council, which plays such an important role as a repository of expertise and knowledge about the Group and is an important facet of its external affairs, which is currently set at a maximum of 24 members, would be reduced to 15 with a maximum length of service of two five year terms. Again, it is hoped that this might remove or at least alleviate the difficulties inherent in convening meetings of such a large and dispersed group.

Fifthly, the Young Georgians perform an important function in attracting, entertaining and informing a younger age profile. In order to link their activities more closely into those of the Group, not least by giving their Chairman a formal seat on the EC, it is also proposed to draw up a constitution for this sub-Group, and to raise the leaving age from 30 to 35, to keep those who make the most of the Young Georgian activities, which have tended to differ in focus from other Group activities, engaged with the Group that much longer. Taken together these proposals are a recognition of the importance of the Young Georgians, many of whom are early career scholars in architectural history and related fields, to the future health of the Group.

Sixthly, it is proposed is again an enabling provision for the creation and oversight of trading companies and subsidiaries. There are circumstances where it would be advisable or more convenient for some activities, perhaps more particularly those linked to fund-raising, should be carried out through distinct operating or trading subsidiaries, which is not uncommon for charities, and there is accordingly a proposal to insert a new provision which provides, where it is considered advantageous to the Group, for their creation of and direct oversight by the EC.

Finally, in addition to its oversight of operational matters, the EC recognises that longer-term strategic thinking and planning is essential to ensure the continuing effectiveness and financial health of the Group. A wide-ranging strategic exercise was undertaken a year ago by the EC which looked at the Group’s activities and resources. As evidence of the importance which the EC attached to this, a new clause is proposed which provides for the adoption and review of a Group Strategy by the EC at least every three years.

These are the substantive changes to the Constitution, being placed for consultation with the membership, following the approval in principle at the 2016 AGM as they require alteration of the Constitution itself. In addition, the EC will be amending and updating the Operational Framework more closely to follow the committee structure adopted since the Strategy was adopted, to clarify and define the roles of and lines of communication and approval between the EC, Officers, the sub-committees, the Secretary and staff.